The Success of Cash For Clunkers

More

by Conor Clarke

The Obama administration has decided to scrap Cash for Clunkers, the program that let you trade in old gas guzzlers for a federal voucher toward the purchase of a new fuel-efficient car, on Monday August 24.

The simple and important thing to remember is that the speed with which the program is shutting down is a testament to its success, not its failure. If the goal of a program is to boost consumer demand quickly -- as the goal of this program most certainly was -- then its good to have the allocated funds consumed quickly. Good stimulus is timely stimulus: We want the money pumping into the economy when economic activity is still below its potential. Economics stimulus is counterproductive when it comes too late.

This is separate from the question of whether or not we want an industry specific stimulus, or whether the Cash for Clunkers program was poorly targeted. (I think it was at least a little poorly targeted, since the vouchers were allocated largely on the basis of whether your clunker consumes less than 18 mpg and your new purchase consumes more -- such that trading in a 17-mpg car for a 19-mpg car would get you a voucher, but trading a 19-mpg for a 30-mpg one would not.) The fact that the money disappeared quickly is a really a reason to celebrate.

Jump to comments

2006-2011 archives for The Daily Dish, featuring Andrew Sullivan

Get Today's Top Stories in Your Inbox (preview)

Is Technology Shifting Our Moral Compass?

"The experience of taking another human life becomes much more trivial."


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Juice Cleanses: The Worst Diet

A doctor tries the ever-popular Master Cleanse. Sort of.

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Video

What If Emoji Lived Among Us?

A whimsical ad imagines what life would be like if emoji were real.

Video

Living Alone on a Sailboat

"If you think I'm a dirtbag, then you don't understand the lifestyle."

Feature

The Future of Iced Coffee

Are artisan businesses like Blue Bottle doomed to fail when they go mainstream?

Writers

Up
Down